TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 725
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....or deduction under Section 80 IA of the Income Tax Act, 1961 (for short "Act") with a direction to the Assessing Officer (for short 'A.O') to recalculate the same by applying the same method which had been followed in respect of the trading loss while allowing the deduction under Section 80 HHC. 3. The appellant contended that four substantial questions of law arise in the case. By an order dated 12.11.2009, a Division Bench of this Court admitted the appeal only as regards question No. 2, which reads as under:- "2. Whether on the fact and circumstances of the case, the Hon'ble ITAT was right in law in directing the Assessing Officer to compute the deduction u/s 80 IA by following the method in section 80 HHC (3) for working o....
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....ted issues"). However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year,....
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....tment has acquiesced in the decision on the disputed issues. The Income- tax Department shall not be precluded from filing an appeal against the disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits." 7. Mr. Rajesh Katoch's contention on behalf of the appellant-revenue that the tax effect must be determined on the basis of the entire appeal and not merely on the basis of the individual questions of law and issues raised therein is well founded. This is clear from the plain language of the circular. Paragraph 4 states that the "tax effect" means the difference between the tax o....
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....n be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limits specified in paragraph-3. The monetary limit, therefore, is qua the disputed issues taken together and not qua any particular disputed issue. The fourth sentence in paragraph 5 further supports this contention as it provides that appeals can be filed only with reference "to the tax effect in the relevant assessment year". It does not refer to the tax effect qua each independent issue in respect whereof the appeal is filed. 9. In the result, the monetary limit stipulated in paragraph 3 of the circular must be determined on the basis of the appeal considered as the whole and not in respect of any indivi....
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....assessee had not maintained separate books of accounts for these two activities and that the ratio of turnover is also not known. It is therefore, observed that the only way out is to split the profit on the basis of the ratio of expenses on purchases and direct expenses of the two activities. The AO found that the total cost of material and other direct expenses was about Rs. 142.46 crores as against which the total cost of traded goods was Rs. 22.47 crores. He, therefore, directed that while computing the deduction under Section 80 IA, 1/ 7th of the profits would be excluded from the total profit. 13. The CIT (A) on the other hand noted that the computation of the loss in respect of the trading activities was filed by the assessee by its....